Discovering minimalism completely changed my relationship with money. The thought of making and spending money went from daunting to freeing. It began to feel like an opportunity to see and do more rather than simply a means of purchasing things in exchange for my time. When I learned how to manage money like a minimalist, I was able to finally save for the things that truly mattered.
Here are ten tips to help you do the same.
1. Track Your Expenses
Tracking your expenses is the only way to truly get ahead of your finances. I mean think about it, if you don’t know what you’re spending your money on, how can you possibly cut back on your spending?
The easiest way to track your expenses is by connecting your credit card to a budgeting app like Mint.
Mint will automatically categorize all of your purchases so that you can see exactly what you’re spending your money on. Maybe it’s groceries. Maybe you’re spending more on clothing than you’re aware of. Seeing your purchases categorized will help you notice any areas where you may be spending more than you should be.
2. Stick to a Budget
After you’ve figured out exactly where your money is going, create a budget that will help you achieve your goals.
No matter what your income level is, you can create a sustainable budget. Trust me! I even wrote a blog post about living on $2000 a month by sticking to a budget. You can read that blog post here.
Creating a budget is simple. Here is a basic step by step guide to creating a minimalist budget.
How to Create a minimalist Budget
- Figure out your net income (AKA your take home income)
- Track your spending! You can do this by using a budgeting app.
- Set actionable goals for yourself. How much money do you want to save? What are some areas that you want to cut back on your spending? Be specific and realistic when setting these goals. Setting a vague goal like ‘I want to save money for a car’ isn’t nearly specific enough for you to be consistent. Instead, make your goal to ‘save $500 a month for a new car’.
- Make a plan! How are you going to reach your goals? *Hint*, keep reading this post for some money saving tips and tricks.
- Regularly audit your expenses and make sure that you are staying on top of your goals!
3. Cut Out Unnecessary Purchases
Your next step is to cut out the unnecessary purchases you’ve identified when you were tracking your expenses.
An unnecessary purchase is a purchase that isn’t essential. Some examples include makeup, clothing and video games. Whereas, unnecessary purchases are things like groceries, rent and car payments.
With that being said, if a purchase isn’t essential to your survival but it is essential to your long term happiness, don’t feel like you can’t go through with it. If you have a hobby that you need to buy gear for regularly, and that hobby makes you super happy, don’t cut those expenses out entirely. Instead, learn how to take care of your gear so that it lasts longer. Read my guide to balancing minimalism and your hobbies for more info!
The next few tips will help you cut out those unnecessary purchases for good!
4. Stop Impulse Shopping
The most effective way to stop buying things you don’t really need is to put a stop to your impulse shopping!
Impulse purchases are things that you buy on a whim. They can be as innocent as picking up a few extra goodies on an errand run or as serious as making a major purchase without thinking it through. Impulse shopping to any extent can lead to serious financial stress.
Luckily, there are plenty of ways to be more intentional with the things that you buy.
I’ve shared 22 tips on how to stop shopping impulsively on my blog! Here is that article.
5. Follow The 30 Day Rule
The 30 day rule is very popular amongst the minimalist community. The rule is simple! Before you make a purchase over $30, wait 30 days.
I recommend having a wish list on your phone with items that you are seriously considering buying. Make sure and document the date that you first decided you wanted that item as well! That way, you can make sure you waited the full 30 days before making the purchase.
You’ll find that at the end of the 30 days, you won’t be as excited about making the purchase as you were on the first day. Most of the time, you won’t even go through with it.
By waiting 30 days, you aren’t allowing yourself to feel instant gratification from the purchases you make. This will be a game changer since instant gratification is arguably the most addictive part of shopping.
6. Make Meaningful Purchases
Learning to manage money like a minimalist isn’t just about saving money. It’s equally important to learn how to spend your money in ways that add value to your life.
Money is a tool. You can use it in the wrong way or you can use it in the right way. It can be used to do nice things for the people that you love, allow you to see the world and help you explore your interests and passions. On the flip side, money can imprison you into a life of meaningless work.
The difference is whether or not you are making meaningful purchases.
Think back to the purchases you’ve made this year. How many of those purchases added value to your life? If you can’t even remember the purchases you’ve made, it’s time to reevaluate what you’re spending your money on.
You’ll remember the trips you took, buying your dream car or splurging on a piece of jewelry for your loved one. Make more purchases that align with your values and your relationship with money will change for the better!
7. Save Money On The Essentials
Let’s be honest, not every purchase you make will be meaningful. Actually, most won’t be.
Nobody is excited to spend their hard earned money on things like groceries, rent and gas, but these essentials are unavoidable.
With that being said, although you can’t completely cut out these expenses, you can cut them in half with these money saving tips!
How to save money on groceries
- Shop seasonally
- Plan your meals
- Buy generic over name brand
- Order groceries through pickup/drive up
- Don’t shop hungry
Looking for even more ways to save money on groceries? I wrote a blog post on 21 ways to save money on groceries! Click here.
How to save money on rent
- Get a roommate (or two)
- Sign an extended lease
- Negotiate your rent, especially if you are releasing
Looking for even more ways to save money on rent? I share a few more tips in my blog post titled, ‘How to Live on $2000 a Month (10 Frugal Tips)’!
How to save money on gas
- Start biking
- Use a gas rewards card
- Fill up on Mondays and Fridays
- Use public transportation
- Carpool
- Work remotely
Money.com wrote a great article about how to save money on gas. Click here to read their post!
8. Be Frugal When You Go Out
Next time you go out, try and be more intentional with how much money you spend. Instead of spending hundreds of dollars on an expensive dinner, go to a more affordable spot. Rather than splurging on several rounds of expensive cocktails, just have one.
The less money you spend each time you go out, the more often you will be able to. You’ll find that the expensive nights out aren’t always funner than the frugal nights out anyway!
9. Fix or Alter Before You Rebuy
Before you run to the store to rebuy something that broke or needs altering, try and fix it!
Being a minimalist is about valuing the things that you already own. So, instead of getting rid of something, try and fix it first. You’ll be surprised by how many things you can repair before you need to rebuy. Plus, it’s a great opportunity to learn a new skill!
10. Buy Used Over New
Buying used items over new will save you so much money! Whether you’re in need of a couch, jeans or a kitchen appliance, you can find it used and discounted online or at a thrift store.
Below are my go to spots for second hand items!
Poshmark, Depop and Thredup – Great for second hand shoes and clothing
Facebook Marketplace and Offerup – Find furniture, used cars, places to rent, outdoor gear, the list goes on and on! You can ship items to your home if the seller allows, or filter your search results to only display listings of items in your area.
To Wrap It Up
Managing money like a minimalist is simple. Save money on the essentials, stop spending on unnecessary things and start putting your money towards experiences that will add value to your life.
How do you manage your money? Let me know in the comments below!
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